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Market Analysis – August 2017

Posted September 6, 2017

It is impossible to effectively time your investments based on the prospects for wars and government policies. Timing is almost always disruptive to financial plans and harmful to long-term investment returns. Investment experts and markets separate their financial commitments from politics. This bull market will end because of a recession and there is no recession in sight. The market is pulling back due to worries about North Korea. Pull backs are expected and healthy for market progress.

The Goldilocks Economy: Since the economic recovery began in March 2009, we have enjoyed modest economic growth, low inflation, low interest rates, steady demand for labor, and slow but steady wage increases. These forces have produced an economy that is not too hot, not too cold, but just right for steady planning and progress. This economic growth translates into solid corporate earnings, which have grown in the U.S. by double digits in the first half of 2017 compared to 2016; and, earnings growth has spread worldwide as the 45 largest economies are participating in synchronized expansion.

Surprising Briskness in Economic Growth: This was the headline in the August 31 New York Times. The article expounded on the economic recovery, now in its ninth year and showing unexpected strength. The U.S. Commerce Department reports that the U.S. economy grew by an annual rate of 3% in the second quarter ending June 30. This is the best quarter for growth in two years, and a great improvement over Q1 2017 growth of 1.2% annualized.

Index Investment Strategies at Bell: In our August 24 Investment Committee Update webinar recorded in the Bell client portal, we introduced insights gained from our years-long research into index investment strategies. Since our first day of operations in January 1991, we have always dedicated ourselves to finding the best planning and investment outcomes for our clients. We have been executing cap-weighted index and fundamentally-weighted index portfolios for clients, where appropriate, based on their financial plans. Please call your Bell advisor if you are interested in learning more about index strategies at Bell.

In general, the technology sector produced the best performance for our selected funds in August. Our Stable Growth accounts are showing steady growth, and with 10-year U.S. Treasury bonds now yielding close to 2%, 2017 continues to be a good year for bond investors. We always welcome your calls.

 

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